Stephanie Link used to own the stock, but she is out of the position because of spreads. She said the downgrade makes a lot of sense because Zions Bancorporation doesn't have net interest income guidance at all; because of that, there is no visibility. Link prefers bigger banks because they are more diversified. She bought Bank of America Corp (NYSE: BAC).
Joe Terranova agrees that bigger banks are the way to go. He added to his Citigroup Inc (NYSE: C) position. He also agrees with the downgrade of Zions Bancorporation. The lack of visibility on the margins is very discouraging, but it's all about the sensitivity of the assets to rates, said Terranova. Among the regional banks, he is watching Regions Financial Corp (NYSE: RF).
Zions stock closed down 5.3% at $42.83 per share.
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